Monday, November 22, 2010

The Wall Street Journal's China Real Time blog has written up research on a subject I've been mentioning for a while in talks: the tiny premium a university education may offer in China today.

The research, by a giant in the field of demographic research in China, Cai Fang of the Chinese Academy of Social Sciences, finds that Chinese university graduates earn, on average, only RMB300 or about US$44 more than migrant workers. Migrant worker earnings are converging with university graduate earnings. Remember that many workers in China's export factories didn't even graduate from high school - many often stop after junior high. In Guangdong province, the situation may be even more extreme: According to my own unscientific studies, in Guangzhou today, you can hire a university graduate with good, serviceable English for RMB2200 or US$331 a month. Factory workers in the same city or nearby Foshan might earn the same. (On an hourly basis, migrants still likely earn less, because they work longer hours.)

Given what we know about Chinese factory worker wages lagging behind economic growth, I have long been fascinated to know how this situation compares with the US. We know there is an emerging shortage of people who see work on a Chinese assembly line as a career - this is driven by demographics, in part, but also by a shift in worker mentality (that is itself difficult to separate from the demographic change). And we know that there are lots more people going to university in China, as there are in lots of other countries.

How does this compare with the situation in the US? Are wages for comparable jobs in the US already the same? It's very hard to do an apples to apples comparison, given how different these economies are, and how many possible professions there are to compare. But the US Bureau of Labor Statistics does conduct surveys of annual wages. Taking two jobs that might be similar to the ones I'm thinking of in China (factory worker and entry-level white collar administration job), the salaries are not that different, according to this data: They're both around US$31,000 a year.

I'm loathe to draw larger conclusions yet, but given what we know about what's happening with Chinese factory wages, it's likely that Chinese factory wages will soon exceed those of the entry level administration positions, at least in shortage-prone areas like Guangdong. Depending on where you sit (in Bentonville, Arkansas, say, or the offices of a labor advocacy group in Hong Kong), this might be a good thing or a bad thing. But it does put the value of a university education in China in a new light. What do you think?

Friday, November 12, 2010

I'm in Osaka for Yomiuri TV's Wake Up Plus! again, and the theme of the hour is the posting on You Tube by a member of the Japanese Coast Guard of the entire video of the September collision between a Chinese fishing trawler and a Japanese Coast Guard boat.

Yomiuri TV is playing a central role in this story, because the Coast Guard member, who is male and 43 but whose name is not yet public, recently called YTV and told his side of the story before coming clean to his boss. The Coast Guard member (whom I'll identify by the handle he used on You Tube, sengoku38) is now in his second day of questioning, though he has not been arrested.

There are lots of issues wrapped up in this story, but a few thoughts:

1. This story has the potential to become Japan's Pentagon Papers. While Americans and Europeans are familiar with WikiLeaks, Japan hasn't had to contend with this kind of leak before. 2. If I were a Japanese potential whistle-blower, this event would give me a degree of confidence. My hope is that there will be a trickle-down effect in other areas, such as companies and government organizations, where Japanese come forward with evidence of misconduct.3. Acting against point two is that the Japanese public, from what I can tell, is not entirely supportive of sengoku38. Many of the people YTV found on the street were critical of sengoku38's decision to release secret information (though some questioned why the video itself should have been a secret).4. There are a lot of contradictions in the Japanese government's response to the collision, as the lovely Takenaka Heizo, who sat to my right, pointed out. They arrested and detained for two weeks the captain of the Chinese trawler, and insisted they had grounds to do that. Then they set him free, all the while insisting they had video of the event that would make the situation clear. Instead of showing this video to the public, they showed a brief portion to Diet members. Now they are questioning for two days the man who has from the beginning said he posted the video on You Tube. How could there possibly be two days worth of questions in this situation?5. Whether or not sengoku38 is arrested appears to be a political decision. The Kan government is watching public opinion closely. There is no consensus among lawyers and other academics I have seen interviewed on whether sengoku38 broke laws.

Initially, I felt this story was another distraction, another example of Japanese politicians playing domestic games with international consequences. To a certain extent, I still agree with that, but I am more in favor of a rigorous domestic debate about this story. As Jeff Rosen, a professor at George Washington University and an expert in this area, put it to me in an email overnight: "I hope this case will provoke widespread reflection in Japan about the values of free expression versus the government's interest in avoiding embarrassment in foreign policy: in practice, plugging leaks is difficult today, even if the Japanese government wants to take a hard line."

This will not be the last time a Japanese person leaks politically sensitive information to You Tube. A new era has begun, a little later in Japan than elsewhere.

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Who I Am

I'm the author of The China Price, an investigation into the human and environmental cost of our pursuit of ever-cheaper goods. I spent nine years at the Financial Times, covering China, Japan, and the UK. Before joining the FT, I researched Japanese defense policy at Tokyo University’s graduate school and worked as an aide to Nakatani Gen, a Japanese politician. A 1997 cum laude graduate of Princeton University, I was born in Washington, DC and now live in Hong Kong with my husband, the photographer Colin Beere.